UCAN's Request for Sanctions
On February 25, 2000, UCAN filed its brief on the issue of whether the Commission should impose sanctions and penalties on MCI Metro. UCAN requested that the Commission impose a fine of no less than $250,000 on MCI Metro.5 UCAN stated that MCI Metro was properly considered a relatively large and experienced entrant in the local phone market, and that MCI Metro had or should have the resources and experience to adequately and lawfully compete in this market. UCAN contended that should the Commission fail to impose a fine on a company of this size, smaller companies would not be deterred from making similar billing errors.
UCAN observed that the Commission has adopted a set of guidelines to exercise its discretion in setting fines within the statutory range.6 A primary factor under these guidelines is the severity of the offense. UCAN quantified the severity of MCI Metro's offenses by looking at the amount of money MCI Metro improperly collected, $617,227, and the number of customer errors that occurred, 74,815. Some customers may have been affected by more than one error. UCAN also pointed out that these errors have a negative impact on competition. Customers who left their incumbent local exchange carrier and encountered a series of billing errors with MCI Metro will be less likely, in UCAN's view, to seek out other competitive opportunities.
The next factor in the guidelines UCAN addressed is the conduct of the utility. While UCAN was willing to excuse MCI Metro's billing errors caused by human error, UCAN sharply criticized MCI Metro for its failure to notify all affected customers of its rate increase. MCI Metro had initially alleged that no law or regulation required such rate notification. UCAN argued that MCI Metro should have been familiar with the rules and that its disregard of these rules warrants a penalty.
UCAN also detailed the history of MCI Metro restitution efforts. UCAN concluded that MCI Metro repeatedly under-assessed the number of affected
customers and made other errors that resulted in customer refunds being delayed up to two years.
UCAN next addressed the factor of the financial resources of the utility. UCAN pointed out that MCI Metro's parent company, MCI WorldCom had cash revenue of $5.1 billion for 1999.
Another factor under the guideline is furtherance of the public interest. UCAN stated that the Commission has the responsibility to prevent further abuses to MCI Metro's customers and to deter similar such violations by other carriers.
The final factor is the role of precedent. UCAN cited several Commission decisions that UCAN concluded supported fines ranging between 50% and 100% of the customer harm.
Based on all these factors, UCAN recommended a fine of $250,000.
5 UCAN also sought penalties of no less than $1.75 million for billing after disconnect but, as noted above, today's decision does not resolve that issue. 6 See D.98-12-075, Appendix A.
